NEW YORK (AdAge.com) -- WPP Group completed its acquisition of Grey Global Group yesterday, marking the end of independence for Madison Avenue's last remaining big independent.

WPP bought Grey for a package of $1.75 billion in cash and stock worth $1,154 for each Grey share.

Grey's chairman and president-CEO, Ed Meyer, celebrated the Monday event by ringing the 4 p.m. closing bell on Nasdaq at the Nasdaq MarketSite building in Times Square. Both Grey and WPP's U.S. shares trade on Nasdaq.

Mr. Meyer will continue as head of WPP's Grey Global unit. But for the first time since he became CEO in 1970, he will have a boss -- WPP's hard-driving group chief executive, Martin Sorrell.

How will that work out? "I think it will be fine," Mr. Meyer said in an interview at the Nasdaq. "He's done an astounding job. I respect the man's success, and I'm glad to be able to contribute to it in some way."

Ed Meyer's payday

Mr. Sorrell will contribute to Mr. Meyer in some way. Based on WPP's stock price today, Mr. Meyer and family interests will enjoy a $478.4 million payday. That includes $402.6 million for his family's shares, a family foundation's shares and stock options; $53.1 million in cash for deferred compensation and supplemental pensions; and $22.7 million in cash for a golden parachute. Mr. Meyer also signed a lucrative contract to run Grey Global through December 2006.

Mr. Meyer's sale timing could hardly have been better. He struck a deal last September to sell Grey to WPP for $1.52 billion in cash and WPP stock, or $1,005 a Grey share. But WPP stock kept rolling, reaching its highest closing price today --$59.95 for U.S. shares -- since 2001. With those gains, Grey shareholders ended up getting $1,154 a share in cash and WPP shares. That's 118 times Grey's 1965 initial public offering price of $9.75 a share.

Grey closing price today was $1,005. That's the amount of cash per share that Grey holders will get if they receive cash. Investors could request cash, WPP stock or a mix. They had strong incentive to request WPP stock since the stock is worth more than the cash. In the end, WPP will pay most Grey shareholders a mix of cash and stock. The deal works out to $1,154 a share.

It's unclear how many shares Mr. Meyer will own in WPP; that depends on how much cash vs. WPP stock he requested for his Grey shares as well as WPP's final prorated payout. If he trades half his family's Grey shares for WPP stock, his WPP stake would be just below that of Mr. Sorrell's $206 million stake.

A celebration and an ending

At the Nasdaq ceremony, Mr. Meyer said he was a "proud father." But for many of the 25 top Grey executives who attended, there were mixed feelings about the passing of an era. "It's bittersweet," said Maureen Maldari, executive vice president and managing partner at Grey Worldwide's Buzz Grey unit. "We're here to celebrate and to end something."

Grey's flagship ad agency, Grey Worldwide, becomes the fourth WPP major agency network, along with JWT, Ogilvy & Mather and Y&R. WPP also operates a smaller network, Red Cell. Grey Global's media agency, MediaCom, will operate alongside WPP's two powerhouse media shops, MindShare and Mediaedge:cia.

Blue-chip clients

Procter & Gamble Co., Grey Global's top client and the world's largest advertiser, will become one of WPP's top 10 clients based on revenue. Other key marketers employing Grey include GlaxoSmithKline, Nokia, BellSouth and Kmart Holding (which is buying an important WPP client, Sears, Roebuck & Co.).

"Our clients represent one-fifth of the Fortune 500," Mr. Meyer said last week at a special shareholder meeting where Grey holders approved the deal. WPP already served more than 300 Fortune 500 companies.

Naming a successor

While Mr. Meyer, 78, will remain head of Grey Global, he has six months to propose a successor for himself as CEO of Grey's ad agency, Grey Worldwide.

U.K.-based WPP, the No. 2 advertising holding company, agreed Sept. 11 to buy New York-based Grey, the industry's No. 7 firm, following a bidding contest against French ad firm Havas and Hellman & Friedman, a San Francisco private-equity firm.

WPP, with about $7.9 billion in revenue last year, adds Grey, with estimated revenue of $1.47 billion in 2004, creating a $9.3 billion to $9.4 billion company, according to Advertising Age's estimate. This will make Mr. Sorrell a bigger player but still leaves him trailing Omnicom Group. Omnicom had 2004 revenue of $9.7 billion.